Louis Vuitton and Gucci: Marketing Mix

Louis Vuitton, a famous French brand, was created by a leather designer named Louis Vuitton (1821-1892). In 1837, 16-year-old Louis Vuitton left his hometown, to Paris to pack for the elite. He opened his first store in London and made the production with high-skilled. Thus make Louis Vuitton become the most delicate symbol of leather traveling articles. A century later, it is a leader in the field of leather goods and also was a favorite in polite society. It includes clothing, shoes, jewelry and so on. (Louis Vuitton inc, 2010). In 1987, Louis Vuitton and Moet Hennessy merging into prevent LVMH Group.

In 1906, Gucci Augustine chi established the Gucci brand and named it after himself. Products of Gucci include fashion, leather goods, and watches. (Gucci inc, 2010) Gucci with its high fashion, sexy style popular around the world. As a symbol of status and wealth, it is a love of rich society. Now, Gucci is Italy’s largest fashion group.

1.2 Theory

1.2.1 Market Segmentation.

Market segmentation can be defined as dividing different groups with similar chrematistic in the market. Business accord different features to product and services for each of them. (Hall et al 2008 p66)

1.22 Marketing Mix

In order to market its products effectively and meet its customers’ needs. Business must consider its marketing mix. (Hall et al 2008 p75) Mastering four main parts of marketing mix plays a vital role in business, product, price, promotion and place.

1.3 Aims

The aims of this report are to analyze the information of Louis Vuitton and Gucci to compare their differences. The comparison will focus on their differences in market segmentation and marketing mix, especially in Chinese market .

2. Findings

17 years ago, Louis Vuitton as one of the first luxury brands to enter Chinese market open its first store in Beijing. At that time, none of Chinese can understand why the value of a handbag worth more than 10000 RMB. But with its promotion in China and the growth of Chinese economic, the sales of handbags from Louis Vuitton rise quickly. Reasons of the success in Chinese market are also the reasons for the success of its brand, excellent market segmentation and holding well four parts of marketing market.

The successful reasons of Gucci is similar to Louis Vuitton. For example, it launched a series of Chinese customs production. ( Paris Fashionable Clothing Week Day 9, 2010) and using Chinese language in its stores. For Chinese market to design the Chinese style products it’s its segmentation. In addition, the aim of Gucci is to open more stores in Asia and eastern Europe. (Reuters, Nov, 27)

Discussion

3.1 Market segmentation

Market segmentations of Louis Vuitton and Gucci are similar. The targets are promoting their brands and meeting the rich’s needs. The differences are that the price of most Louis Vuitton’s handbags is higher the price of Gucci and their different styles. “High quality and civility” are the selling points of Louis Vuitton which focuses on its classical product leather handbags. In the other hand, Gucci adapts to the younger customers’ demands. Because of the differences of their features and prices, their market segmentations also different. Louis Vuitton targets the customers who are love high quality and noble. The young ladies who are fond of “fashion, sex and convenient” items will choose Gucci.

3.2 Marketing Mix

3.2.1 Product

Product is a main type of marketing mix. Innovation is the secret of Louis Vuitton handbags to maintain its position, it has a series innovation with the change of generation. In order to attract young woman, Louis Vuitton cooperated with artists Stephen Sprouse, thus Epi handbags with colourful style promoted to the market. Now, in order to meet the needs of the younger generation, launch a series of graffiti handbags. (Spring and summer fashion show of LV in 2010) However, Louis Vuitton still continues its style of noble and high quality, its handbags more suitable in semi-formal occasions.

Gucci pays a great attention to its design in its development of 100 years. The style of its handbags is convenient and fashion, they are also its unique selling points. But compare the quality between Louis Vuitton and Gucci, the handbags of Gucci worse than Louis Vuitton. The reason is that Louis Vuitton focus on the quality of leather and Gucci pay more attention to its fashion.

3.2.2 Price

Another element of marketing mix is price. “The pricing policy that a business chooses is often a reflection of the market at which it is aiming” (Hall et al 2008 p75) Louis vuitton is more better in leather material, the majority of handbags of Louis Vuitton is more than Gucci. For instance, the price of flower handbag of Louis Vuitton is RMB 17800, the new style of handbag of Gucci is RMB 6800 in 2008. From these comparative results, it can found that the handbag of Gucci is cheaper than Louis Vuitton’s. The conclusion is that Gucci target the middle class while Louis Vuitton target upper class.

3.2.3 Promotion

Nowadays, promotion plays an important role in marketing mix. Gucci and Louis Vuitton focus on the advertising on TV and fashion magazine. Sophisticated fashion magazines are their main promotion media, which help their segmentations become clear and promote worldwide. Such as << Vogue >>. The style of advertising of Louis Vuitton is noble and the feeling of Gucci presented to customers is sexy. Both companies promote their production with popular stars. For example,Gucci show its new style with famous Hollywood in Oscar or Canned movie awards ( 2010 Oscar Movie Award). But Louis Vuitton appears its handbags with famous models even the successful politician because it meet its practical style. Moreover, Louis Vuitton promotes its products with Chinese stars Zhang Ziyi to attracts Chinese market. ( 2010, The Waiting City)

3.2.4 Place

Both of Louis Vuitton and Gucci are international brands and luxury goods, it results in their requirements on the choice of stores are very high. Therefore, they open stores in the upscale business district, such as and Champs Elysees. They divide into different level stores to meet different society classes, flagship stores and specialty stores. Flagship stores with higher level, in which not only focused the design of stores but also reflect the spirits of the brand. In this year, Louis Vuitton opens two stores in major city on the same day in China, Shanghai. ( Shanghai Daily, 2010) From this can reflect that the economy and the population of cities also are the important factors to luxury brands while they choosing places.

4. Conclusion

According the comparisons between Loris Edition and Guard, getting the conclusion is that these two brands are quiet similar in market segmentations and marketing mix. It can found that differences in their styles and price, which lead their aims are different. The style of Loris Edition is noble and targets a higher line than Guard, particularly reflected in the price of a handbag. The features of handbags are convenient and sexy and it more suitable for middle class.

5. Recommendation

According the information mentioned above, the line for Louis Vuitton is sophisticated line and its price is too high for the young even it innovate the new styles to meet the yong’s needs. Louis Vuitton can promote its products with lower price to meet the young, it is good for the development of its market segmentation. Gucci needs to care more about its quality of handbags and it can attract more customers to buy it, especially the more richer class.